OREANDA-NEWS. November 16, 2009. Climate change, rising energy prices and increasing local sourcing are current and future challenges for the transport & logistics industry, according to a new report by PricewaterhouseCoopers (PwC), reported the press-centre of PwC.

Over half of the respondents to PwC’s recent survey of transport and logistics executives predict a future scenario in which alternative energy accounts for up to 80% of their overall energy mix in some countries. The share of energy from renewable source in consumption, according to PwC research, would become twice or even three times as much as now depending on the country.

For example, share of renewable source in Brazil by 2050 would probably get 56% of total demand for energy sources in comparison with oil-oriented Russia having only 4,5%. Oil prices will increase, though this factor, along with a rise in the share of alternative sources of energy, will not revolutionise the transport sector by 2030, as experts believe – environmental factors may have a greater impact. The majority of respondents see the reduction of CO2 emissions and other emissions (such as nitrogen oxide and noise) as an enduring target for both the short and long-term future. Nearly 70% of respondents expect that by 2030 all emissions will be tracked in the supply chain and factored into the price of the product

Alexander Sinyavsky, Partner Transportation & Logistics Leader, PricewaterhouseCoopers in Russia, noticed
“All transport and logistics companies – from express mail services to airlines – will, in order to remain competitive, have to resolve issues which relate to tracking, evaluating, and documenting all emissions in their supply chain. At present this is not a major problem for most companies in Russia, but I’m sure that is going to change – it’s simply inevitable”.

Douglas Grier, Manager, Climate Change & Sustainability Services, PricewaterhouseCoopers in Russia, added:
“Today, the majority of Russian companies have no climate change-related strategy developed. Related risks and opportunities are often not evaluated, or an inadequate evaluation is made. However, climate change is already a key factor affecting a number of industries – aviation, for example. To illustrate this point, all airlines that fly to the European Union must comply with ETS (European Emissions Trading Scheme) regulations; however, it is expected that many Russian airlines will in the near future beinsufficiently prepared to satisfy these regulations”.

Regionalisation will be the long-term driver for T&L companies active in the automotive industry. Transportation costs have long been an important criterion in site location for OEMs. About 60% think that transportation costs will be the predominant factor in the location of production sites. The oft-quote maxim "build where you sell" will probably remain a key factor in determining the location of production sites in the future. North America and Western Europe are already mature automotive markets; growth will continue to come primarily from emerging markets such as Russia and East Asia. These regions are therefore also likely to be the primary locations for new assembly plants.

Nearly six in ten respondents believe that their home and work environments, will become more integrated, with travel distances diminished. Over 45% of respondents even expect a reduction in individual mobility compared to today.

Although 60% of those surveyed think that consumers will prefer locally produced products by 2030, respondents do not believe there will be a reverse of globalisation by 2030.

Alexander Sinyavsky, concluded:
“Increased awareness on the part of consumers about sustainability will change consumer behaviour and in turn, global supply chains. Will this also apply to Russia? Yes, certainly, because Russia is one of the links in the supply chain, and also because domestic consumer demand will be affected by companies being more concerned about issues surrounding sustainability – although of course this change will take place later than in developed countries”.

A further finding was that more flexible and efficient usage of transport modes will emerge. The majority of respondents anticipate that autonomous and self-controlled systems and automatic guided vehicles will revolutionise freight transport. Sixty percent consider that a concentration of transport capacity, for example through the use of LKW transporting more than 60t (mega trucks) or ultra-large container ships will counter increasing costs.

For a copy of the study "Transportation & Logistics 2030 - How will supply chains evolve in an energy-constrained, low-carbon world?" please visit www.pwc.com/tl2030 or www.tl2030.com